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The ongoing sell-out of Canada
June 9, 2008 - 12:29pm
When even Diane Francis and Preston Manning start to worry about Canadian sovereignty, we know we've got a serious problem...
Canadian direct investments abroad...$1,182,416,000
Foreign direct investment in Canada...$521,127,000
Statistics Canada
During 1997-2006, Canadians owned more FDI abroad than foreigners held here. The decline in 2007 is due to the appreciation of the Canadian dollar, which has the effect of reducing the value of assets held abroad.
[ 09 June 2008: Message edited by: Stephen Gordon ]
Yes, and only 81% of DFI went toward takeovers of Canadian busineses, corporations and crown assets in 2007. The hollowing out of Canada has slowed somewhat from its previous torrid pace now that there is majority foreign ownership and control of 36 key sectors of Canada's economy, unparalleled among richest economies. Canadian pension and other fund managers complain that there are fewer and fewer places to invest in Canada, what with so much of our economy scooped up by marauding foreign capital now as it is.
From the main HarperCollins article:
ChillyWilly for sure. What the hell happened to the idea that we're supposed to embrace globalization, and "what's mine could be yours" free trade? Ya right. Apparently it's okay for Yanqui imperialists to own Wild Rose County and dictate Canada's national energy policy, but those swarthy foreigners need the door slamming on them. Global-shmoebbel The truth is, our patsies are U.S. patsies and no one else's.
[ 09 June 2008: Message edited by: Fidel ]
I did so. Thanks for pointing that out, Steven. While I find the Statscan website fascinating, I do have trouble deciphering the stats. No excuse for my mistake though, just in a hurry and careless.
Feds gain $1.21 b in Arctic land saleDon't forget the Brits. Or French giant Total SA.in the oilsands.
The thrust of LTJ's article in the opening post is that Canada's corporate managers are either not motivated enough to thwart foreign takeovers or complicit in the takeover for personal gain. Canada's chartered banks complain that their size makes them too small to compete in the global market. Canadian financial markets are considered too small to raise the capital that projects require.
Whats the solution? A regulated market to keep foreign ownership out or greater productivity and innovation to make Canadian companies competitive globally?
For every article bemoaning the 'hollowing out' of Canada there is another one cheering Canadian global competitiveness.
I think you're the only one in this thread cheering Canada's lack of political transparency and lethargic showing for ECGI. Canada's democracy gap is largely to blame.
And we're pretty sure someone on Bay Street will ring a cowbell at some point in the distant future when Canadians own controlling interest in a single sector of the U.S. economy.
And that's Canadian money leaving the country to prop up growth there not here. Meanwhile opportunities for Canadian pension fund investment in our own country are frittered away with every foreign takeover.
Or maybe they're just bad managers. I was at the Canadian Economics Association meetings in Vancouver over the weekend, where U of T's Dan Trefler gave the Innis Address. It focused a lot on productivity and innovation, and why Canada does poorly there when compared to the US. One possibility might be some sort of cultural thing, in which Canadians don't innovate because it's considered to be bad manners or some such. But then he cited a bunch of opinion polling data about attitudes towards entrepreneurship, and attitudes in Canada and the US are pretty much the same. So it's hard to conclude that there are any cultural reasons for the gap.
But there was one question where there was a significant difference. When asked what sort of education was required to do well in business, Canadian managers were far more likely than their US counterparts to say that a university degree wasn't necessary. Of course, that might be because 70% of Canadian managers don't have a degree, while that's the case for only 50% of US managers. As Trefler said, "Canadian managers are underachievers."
So it sort of makes sense that Canadian investors would be willing to sell their shares to foreigners. They're dumping poorly-managed domestic firms in order to buy into better-managed foreign companies.
And according to Mel Hurtig's new book, The Truth About Canada:
- we're overtaxed only in comparison with the U.S, but with other OECD countries with similar equality and standards of living, Canada is 23rd on the high-tax scale. But we'd never know that from our Liberal newspapers softening us up to become another Puerto Rico only colder.
- The Canadian industrial average is 3.8% of revenues spent on research and development. For the energy industry it’s 0.75%. For the oil and gas sector it’s 0.36%.
- rank 109th in voter turnout
- rate 54th for number of doctors per 100,000
- 126th out of 146 for reducing pollution
- Canada has the fourth highest obesity rate out of the 30 OECD countries.
- In 2006, Canada’s poverty rate was worse than 18 other OECD countries.
- More than 4 in 10 First Nations children are in need of basic dental care…Diabetes is 3 to 5 times more common than the Canadian average and tuberculosis is 8 to 10 times more common… Aboriginal people are about 3% of Canada’s population, but they make up about 20% of all prison inmates…58% of Natives living on reserve aged 20 to 24 have not finished high school
- In one month in 2006, 753,458 Canadians obtained food from a food bank; 41% were children.
- In social spending as a percentage of Gross Domestic Product, Canada is in 25th place out of 30
- In most western European countries low-paid jobs are between 8% and 12% of the total; in Canada they make up 21% of all jobs.
- During the first half of 2007, Canada’s private sector dropped some 90,000 jobs, the largest decline in over a decade and a half
- 1990s saw the highest rate of unemployment in Canada of any decade since the great depression.
- In the five years before the Free Trade Agreement came into effect in 1989, employment in Canada grew at an average annual rate of 2.9%. In the five years from 2001 to 2005, it grew at only an annual average rate of 1.84%.
- In 2005, over $22.3 billion of foreign controlled corporate profits left Canada, mostly for the US.
What's afta NAFTA!
[ 09 June 2008: Message edited by: Fidel ]
I was interested in giving that a read but I didn't want to give Diane Francis any money. Oh well, to the library, I suppose.
It's definitely passing strange watching those who were so bullish on removing all restrictions on investment and trade running away so quickly from their former position.
[ 09 June 2008: Message edited by: Doug ]
[ 09 June 2008: Message edited by: Fidel ]
Underachievers or perhaps promoted (the Peter Principle) above their level of competence. As a retired businessman and resource contractor,I can vouch that business accumen and technical skills can only take any entrepreneur so far before the dynamics of an expanding business overwhelms an over-achieving but under-educated entrepreneur.
Not technical education but the sort of education that expands an individual's ability to get ahead of the curve. I read an article about MBAs stating that the degree costs six figures and is not necessary for a quality career but the days of building a better mousetrap in your barn,expanding it into a family manufacturing concern and passing the business on to the next generation are over.
From my perspective, it is always the individual who stays in the office, has the organisational skills and hires the technical and operational skills who prospers, eventually driving under or buying out the competitors who are hands-on but lack the organisational skills or motivation to stay ahead of the curve.
[img]confused.gif" border="0[/img]
What I find interesting about many columnists and authors, including Ms. Francis is that they are more interested in making a book sale than they are in making a case.
To be a better country, and to aspire to be the best country, we're going to have to spend more money on health care, education, social programs, defence, and innovation. Where are we going to get the money? . . .
First, if Canada's total tax revenue as a percentage of GDP was only the equivalent of the European average, we'd have over $39 billion more to spend on our own priorities. That's a lot of money.
Secondly, as indicated earlier, if Canada's social spending was only the average of all the OECD countries, again as a percentage of GDP, we'd be spending an additional $47 billion on health care, education, job training, helping poor families, and other social programs.
Layton says feds involved in 'biggest theft in Canadian history' And with backup from the Liberals, too
Would you be anymore interested in her bookish opinion if you knew she is now a supporter of free trade and "increasing foreign competition", whatever she means by that?
Shows the maturation of the Canadian capitalist class, I'd say.
Canada is part of the G7 and a major economic power. UBC prof. Philip Resnick places Canada on "the perimeter of the core" (i.e. still far from the elite of military/geo-political power) - I think that's pretty accurate.
I'm well aware of Ms. Francis's opinions. I read her regularly but that does not infer agreement or even any regard for her opinions.
This 'ongoing sell out of Canada' canard crops up occasionally and is flogged mercilessly via innuendo supported by little fact. Quoting good old Mel does little to alieviate the complexity of a subject that,in AD 2008, is compounded by the size of the corporations eating or being eaten.
Vale, Extrata, BHP Billiton and Rio Tinto are all in play with the added threat of Sovereign Wealth Funds acquisitions. In a purely economic sense, government intrusion is not helpful but the threat from SWFs is more political than economic.
Canada's low inflation, high dollar and strong fiscal capacity should protect it from predatory takeovers but if our homegrown corporate flagbearers are too compacent, lazy or indifferent to the threat, they will be eaten.
Where are we going to get the money?
Not by killing off energy exports and chasing foreign investment away.
Oh! Hey - lets tax the rich and chase them out of the country too. If it works for Mugabe and Fidel and Chavez, its gotta work here too.
Don't worry about that 3,000% inflation thingy either, its only stoogocrat capitalist propaganda perpetuated by the lackys of the MSM.
I agree with Thomas Caldwell without reservation.
Take this one step furthur where the corporate elites,with the blessing of the government have moved their wealth offshore to avoid Canadian residency while the average person must pay Canadian taxes on worldwide income.
I think Paul Martin is probably a decent man but his sense of entitlement whereby he does the chicken - running about as PM, dispensing billions of tax dollars to support his election vanity - while simultaniously moving his wealth,CSL, offshore to avoid Canadian taxation,environmental laws AND the hiring of Canadian workers is repugnant.
Paul Martin is only one of a long list of elites who have cashed in,left their concerns in the hands of managers and cocked a snook at Canada.
I am merely guessing but I'll bet most of these pricks got the Order of Canada to boot.
A couple of lines in, I was preparing to have to agree with you, jester - an unusual situation, as I'm sure you'd agree.
But then you said that stuff about Paul Martin probably being a decent man, and gave me my out.
Thanks for the break. [img]wink.gif" border="0[/img]
I give you lots of breaks but you are too fixated on your neo-con, neo-lib neo-whatever hobby horse to notice. What I said about Paul Martin is no compliment.
Paul Martin et al probably are decent humans in their personal personna but their actions in pursuit of power and wealth are repugnant.
What I mean by this is that they see no moral equivocacy in trampling the rest of the decent Canadians - who do not share their economic advantages - and bending the rules in their favour in their thirst for wealth and power at the expense of others.
[ 11 June 2008: Message edited by: jester ]
You're not making sense, jester. There are examples around the world where big oil companies cough-up the royalties, and pay their fair share of taxes on resources. The proof, as I have laid out before thine eyes several times before, are the whopping petroleum funds stored up by Norway, and Russia since just 2004, and Venezuela, and the higher natural resource tax regimes of several other economic zones including Saskatchewan and Alaska.
Neither Cuba nor Zimbabwe(Rhodesia) have Alberta's unparalleled in the world oil and gas to give away for a song in padding the pockets of crooked politicians and multinational energy companies the way it is here in this Northern Puerto Rico with a dwindling population of polar bears.
Mel Hurtig already points out that real OECD countries have real overall tax revenues to pay for things which are necessary for competitive capitalist economies. Once again for the hard of hearing, Canada does not rank in the top ten most competitive capitalist economies. So it looks like we need real politicians in Ottawa and Alberta to encourage and nurture a much more competitive form of capitalism than this very non-transparent and uncompetitive gravy train form of it that exists here for a long time running.
You're comparing Canada, one of the largest countries in the world with unparalleled natural resource wealth in the world to countries no larger than PEI or Newfoundland and which have been targets of vicious, and and according to the democratic vote of United Nations, illegal and genocidal trade sanctions and committing political interference in those countries' democracies for far too long. Just between you and me, it always helps to compare apples with apples, jester. [img]tongue.gif" border="0[/img]
The braintrust in Alberta has recently reaffirmed their timidity by reelecting the Conservatives under a plodding caretaker premier who has neither the vision or the capacity to move the province forward.
Since no mention of stupidity is made in the constitution, the rest of the country will have to accept the rights of provinces to make their own beds.(And a fortunate instance that is for one D.Mc Guilty.)
I found a lovely report on the the projected revenue and tax capacity of the Beaufort Sea fields feeding the MGP. I took note of the fact that revenues accruing to government are as high or higher than free cash to those evil corporations. (79 billion to gov over the 35-45 year life of the fields as compared to 73 billion to industry - direct revenue to gov, not counting income taxes etc on employment) and now, as with the Parkland report,I can't find it again.
In the present, much of the foreign investments by SWFs have more to do with dumping FE holdings in USD into Canadian holdings in a flight to safety than any nefarious control agenda.
Make no mistake listening to the BS emanating from Central bankers,especially the American. Bernanke is calling a halt to rate cuts because he has to save cuts to address the next crisis, not because he has any intention of addressing inflation.
If Bernanke tries to go hawk with an interest rise, the precarious derivatives mess will collapse around him. If he doesn't, inflation will eat his agenda. The only weapon he has is to try to talk the suckers into believing that 'the worst is over'.
The fact is that the most volatile of the worthless paper has not yet rolled over and the smart money from Abu Dhabi to China to Brazil is frantic to get out of the dollar into holdings in secure, plodding currencies backed by high retail savings rates,government surplusses and low inflation.
Got any ideas on dull plodding currencies with good backing? [img]biggrin.gif" border="0[/img]
oops, nevermind, Coors already bought them I think.
Don't aesthetic considerations ever play a role in these things ? Isn't there some inherent goodness in having Molson be Molson, MDI be MDI, etc.
I would think the world would have learned a lesson from Enron ... Tyco ... there defaulted mortgage-backed securities. American corporations are decreasingly ethical over time, it's better to not be owned by a Monsanto.
Would it be a reasonable idea for the NDP or somebody to put together a position regarding the sale of Canadian companies. For example,
"If you're Blackwater, Monsanto, Northrop Grumman, ATK, (etc.) don't even THINK of buying our communities. Your history of fraud & human rights violations makes you a bad neighbor. We don't need your investment dollars. But we'll let you buy some of our oil, as long as it doesn't trash too much of our environment."